A poor government clerk from a remote and poverty-stricken region of northern India was partying with film stars on Thursday night after becoming the first person to win 50 million rupees, worth over $1m or £634,000, on an Indian gameshow.

In an astonishing real life version of the plot of the 2008 Oscar-winning film Slumdog Millionaire, whose impoverished hero from a tough neighbourhood of the Indian commercial capital Mumbai wins the biggest prize on a TV quiz show, 27-year-old Sushil Kumar answered a final question correctly to take the jackpot of the massively popular local edition of Who Wants to Be a Millionaire?

"We can't believe it. The whole village have come to our house. We are worried that my dad will die of happiness," Sunil Kumar Patel, the winner's brother, told the Guardian. "We can't speak to Sushil. His mobile is off because he is out with the stars and on and off planes."

Kumar, who has a master's degree in psychology from a local college, wept when the Indian movie legend Amitabh Bachchan, the show's host, handed him a cheque for 50 million rupees after the contestant gave all the right answers in the show's final round.

On his blog Bachchan described "the tension as each question was meticulously answered … and then [he] waited … till almost eternity to decide on that final answer.

"The entire place just exploded. The family of the contestant … ran on to the set in uncontrollable joy and screams and tears of happiness, whilst the live audience were whooping it up on their feet with the loudest scream I have ever heard," Bachchan wrote.

Before Kumar went on the programme, which was recorded on Tuesday and will air next week, he earned around £90 a month as a government office worker and supplemented his income as a private tutor in the small town of Motihari in the eastern state of Bihar.

The third of five sons, he was working on a short-term contract as a computer operator on a public works scheme in the rural West Champaran district, close to the Nepali border.

Bihar is one of the poorest states of India and its remoter areas, such as Motihari, have been largely untouched by India's phenomenal recent economic growth. Social indicators in much of Bihar are on a par with sub-Saharan Africa or worse.

Kumar's brother said his family had been too poor to afford a television set and had watched the quiz show at a neighbour's home. "We all used to watch the show from its beginnings years ago and Sushil always knew all the answers. People used to say: 'Why don't you try it? You could win the money!'"

Another reason was the dream of meeting Bachchan in person. A cousin, Sanjay Kumar, told the Calcutta Telegraph newspaper that the winner had first learned about his selection to appear on the programme – known locally as KBC, short for Kaun Banega Crorepati in Hindi – only two weeks ago. He had travelled to Mumbai with his wife Seema and two brothers last week. None had flown in an aeroplane before, or travelled to a big city.

On his crucial ninth question in the final round, Kumar sought the help of a local teacher on his "phone-a-friend" lifeline, the cousin told the newspaper.

According to the Associated Press news agency, Kumar said he would spend some of his prize money on a preparatory course for India's tough civil service exam, which could lead to a secure and prestigious lifetime job.

Kumar said he would also buy a new home for his wife, pay off his parents' debts, give his brothers cash to set up small businesses and build a library in Motihari so the children of his village would have access to "books and knowledge".

Local residents said they were proud of Sushil, who "would bring back glory to Motihari", now notorious for its many kidnap and extortion gangs, the Calcutta Telegraph reported.

The town, 140 miles north of the state capital of Patna, was the birthplace of the author George Orwell. "This is the biggest Diwali gift we could ever have," Sunil Kumar told the Guardian.

The win will inspire tens of millions of aspiring young Indians desperate for an opportunity to escape from lives of poverty, grinding labour or professional frustration.

Gameshows get audiences in the tens of millions. "There is intense aspiration. We have become a nation in search of the good life, a better life, just the path to take is not clear. The gameshows are hugely popular because winners can do overnight what it would otherwise take generations to do," said the bestselling author Chetan Bhagat, whose books deal with the dreams of India's young.

Bhagat sat on the panel for a programme in which young people competed for a job as a TV anchor. "Huge numbers are looking for role models and it is through knowledge and education that the Indian middle class has always sought to realise dreams," he said.

Other gameshows which have vast audiences have included cooking competitions based on MasterChef, an Indian Pop Idol and a Big Brother spin-off called Big Boss.